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Ringneck Energy
Rapid City, Pierre & Eastern Railroad Helps Translate Vision into Reality at Ringneck Energy
Leadership can be defined as the capacity to translate vision into reality. Over the past century, American business has been replete with leaders who match that definition. There have been high-profile leaders, ranging from Henry Ford and Walt Disney to Bill Gates and Steve Jobs, who built enterprises with global impact. There are also countless business leaders who have turned their visions into reality on a smaller scale, creating jobs and stimulating local economies. You can count Walt Wendland, president and CEO of Onida, South Dakotabased ethanol producer Ringneck Energy, among those. In the summer of 2014, Wendland envisioned building a profitable, environmentally friendly ethanol business in Onida, a town of about 650 people located almost squarely in the center of the state. To succeed in the ethanol marketplace, the business would take advantage of locally grown corn crops as well as the availability of rural water and natural gas to fuel the operation.
SHUTTERSTOCK BY SMILEUS Ringneck Energy’s environmentally friendly ethanol business in Onida, South Dakota.
State-of-the-Art Plant Wendland foresaw building a state-of-the-art manufacturing facility that would produce 80 million gallons of ethanol annually. The business would stimulate Onida’s economy by using local products, transportation modes and processes whenever possible and provide a safe and rewarding work environment for approximately 40 local employees. The new company would be named after the ring-necked pheasant, the official bird of South Dakota. Wendland’s vision took a step closer to reality in August 2017 when construction began on the manufacturing facility he imagined. It fully came to fruition in April 2019, when the Ringneck Energy plant produced its first gallon of ethanol. All in, the final cost of the plant was $150 million.
RCPE Provides Conduit to Markets A critical element in bringing Wendland’s vision to life was G&W’s Rapid City, Pierre & Eastern Railroad (RCPE), which spans the entire width of South Dakota and then some. The road would be an all-important conduit for moving to market the ethanol produced at Ringneck’s new plant. “RCPE gives us the ability to
—Jared Gooch, assistant vice president of sales and marketing for G&W’s Western Region railroads
connect seamlessly with BNSF, Canadian Pacific and Union Pacific in order to get our ethanol to the best markets in North America,” Wendland says today. “About 60% of the approximately 2,500 carloads of ethanol shipped by Ringneck in 2021 were destined for markets on the West Coast, while another 40% were bound for the Southwest and Gulf Coast,” says Jared Gooch, assistant vice president of sales and marketing for G&W’s Western Region railroads. “The remaining shipments went to Texas and Oregon.”
Communication and Coordination Are Essential Ethanol shipments from Ringneck’s site require a great deal of communication and coordination, according to Gooch. “Due to land limitations, Ringneck has a track layout that is not ideal for unit trains. As a result, we regularly communicate with the Ringneck team to ensure that we meet their service requirements.” “Good communication is the basis for the high service levels we need,” agrees Kevin Kjorsvik, Ringneck’s commodities manager who oversees rail transportation. “Emails go back and forth regularly, and we probably have four to five phone calls a week with RCPE’s operations teams, trainmasters and others to be certain that railcars are where we need them when we need them.” Safety is another reason communication between Ringneck and RCPE is so important. “Ethanol is a hazardous material, which requires an even higher level of communication and coordination than non-hazardous cargo,” says Gooch. “When the Ringneck plant ramped up ethanol production as the pandemic began easing, both Ringneck and RCPE made a determined effort to improve safety communications. As a result, we have had no safety issues, and we intend to keep it that way.”
Long-Term Partners Today, RCPE is even more integral to Ringneck’s success than it was when the company first opened for business three years ago. “Locally grown corn supplies have tightened, as we witnessed this spring, forcing Ringneck to increase its supply radius to source product,” explains Gooch. “Because the corn is coming from up to 100 miles further away, rail economics are more attractive. It now makes more sense to bring it in by rail, and RCPE is the beneficiary. “Some of our biggest shippers, such as Agtegra and Archer Daniels Midland, now regularly supply Ringneck with feedstock by rail,” Gooch continues. “This has had a very positive impact on the efficiency and effectiveness of our operations with Ringneck. When RCPE cars both originate and terminate at the Ringneck plant, it means quicker cycle times and faster turns of equipment, which enable RCPE to handle higher grain volumes overall.” The numbers best tell the story of RCPE’s increasing business with Ringneck. “RCPE is now delivering about 270,000 bushels of feedstock corn to our plant every month,” says Ringneck’s Kjorsvik. “In addition, about 98% of the ethanol we produce is delivered to market by rail, beginning with RCPE. So, to say that RCPE is important to our success is an understatement. I anticipate we will be partners well into the future.” n
Weathering the COVID Pandemic Key to Ringneck Energy’s Survival
The new Ringneck Energy plant opened in April 2019 and, after a few months of fine tuning the operation, it was approaching full production capacity by the fall of that year. Ringneck’s good fortune, however, was not to last.
In March 2020, eight months after Ringneck’s plant produced its first gallon of ethanol, the COVID-19 virus exploded in the U.S., and Ringneck found itself in a battle for survival. With millions of Americans quarantined at home and working virtually, the demand for ethanol dropped precipitously. In a matter of weeks from the onset of the pandemic, production at the company’s new plant fell from 250,000 gallons daily to about 135,000 gallons of ethanol per day. Ethanol prices plummeted from $1.30 per gallon in the early weeks of the pandemic to about 80 cents per gallon – well below the cost of production.
Luckily for Walt Wendland and his vision for Ringneck, a lifeline came from an unexpected source. Because the plant met certain purity and sanitation standards, the U.S. Food and Drug Administration (FDA) gave approval to Ringneck to produce badly needed alcohol for hand sanitizer. In April 2020, Ringneck began churning out alcohol bound for the hand sanitizer marketplace and would continue to do so until August 2020, when demand for hand sanitizers began to drop. Looking back, the ability of Ringneck to quickly pivot from producing ethanol to making alcohol for hand sanitizer was critical to keeping the company on the road to long-term success producing ethanol.
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